Did you know that a very large part of the expenses related to rental property ownership is tax deductible? You'd be surprised at how many people don't know how to make their tax money work for them!
For instance....
The depreciation on a $500,000 home can reduce your taxable income by $18,181.00 per year! At a 35% tax bracket, that puts $6,363.00 BACK IN YOUR POCKET after taxes.
The mortgage payment on a $500,000.00 home with a 6% interest rate, 10% down, and 30 years to pay is about $2,698.00 monthly, or $32,375 annually. MOST of that is interest. In the 35% income tax bracket, you'll deduct ANOTHER $10,000 (+/-) from your taxable income!
Rental income can be as much as 6% or higher on some of our OBX properties. On a $500,000.00 home, that's $30,000.00 you'll use to pay your mortgage bill.
If you're giving too much money to Uncle Sam....we need to talk!